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Maxim Integrated Sheds Converter Chips

The company avoids further litigation.

Maxim Integrated Products

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has found a pragmatic solution to litigation headaches.

The Sunnyvale, Calif.-based chipmaker said Tuesday that it is discontinuing its business making certain types of analog-to-digital converter chips, saving it from a costly trial with rival

Analog Devices

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Maxim said exiting the business would facilitate the settlement of an intellectual property dispute with Analog.

Besides, Maxim noted, the market for standalone high-speed, high-resolution converters is limited in size, and there are too many other competitors playing in the market.

"Maxim has decided to focus its research and development team on other existing opportunities that have more attractive return on investment," said CEO Tunc Doluca in a statement.

"We are a company with over seventy product lines and the decision to de-emphasize standalone high-speed converter products will have not significant impact on our near term revenues and earnings and will improve return on investment in the long term."

The company did not provide further details on the lawsuit with Analog Devices. Representatives from both companies were not immediately available for comment.

In the statement, Maxim said that it will no longer develop a particular type of stand-alone converter chip for a period of four years. Maxim said the restriction does not apply to analog-to-digital converters that are integrated with full functioned system-on-a-chip products.

Shares of Maxim were off 2 cents at $31.73 in extended trading Tuesday. Analog Devices shares slipped a penny to $39.73.